Dragonfly Partner: Crypto VC is Evolving, Not Extinct
Dragonfly Managing Partner Haseeb Qureshi stated in an interview with Bloomberg TV during Token2049 that crypto venture capital is not extinct but is evolving.
He pointed out that from 2021 to 2022, more venture capital was raised under the guise of "investing in crypto projects," with the belief that simply investing money and tokens would automatically increase asset value; the situation is now different, with few players of institutional quality that can genuinely add value to projects.
Qureshi noted that most of the easy money in the crypto space has disappeared, and we are currently in a phase that requires real value contribution; Dragonfly previously completed a $650 million fourth fundraise in February this year, matching the size of the previous round.
The fund exceeded its target in a bear market atmosphere, with recent investments including a $75 million Series C round for payment network Mesh, focusing on payments, stablecoins, and related infrastructure.
The number of active crypto investors has significantly decreased from the peak in 2022, with some analyses showing a drop from a peak of 1,177 to about 150; Qureshi has previously stated that crypto VC may enter its final cycle around 2030 due to enhanced network effects of leading platforms.
Capital is shifting from a "broad net + token appreciation" model to a few institutions that can provide added value, with project teams increasingly relying on investors who can help with product implementation and institutional connections; general crypto VCs are under pressure, while funds focusing on payments and real use cases continue to receive ongoing allocations.
Qureshi emphasized in the interview that this is not a time when everyone can be a crypto VC, but rather a phase that requires genuine value contribution to projects.
Source: Public Information
ABAB AI Insight
Dragonfly completed fundraises during the bear markets of 2018 and 2022, betting on projects like Polymarket, Ethena, and Rain, while avoiding some popular narratives; Haseeb Qureshi has publicly discussed the trend towards centralization in the crypto industry post-maturity and emphasized value contribution over mere capital injection at events like Token2049.
The firm concentrates its funds on payments, stablecoin issuance, and cross-chain infrastructure, providing project connections beyond capital through fund size and institutional networks, replacing the "spraying money and waiting for appreciation" model with selective value-added investments.
This is similar to the path traditional VCs took after the internet matured, shifting from broad investments to focusing on verticals, and parallels the historical narrowing of space for new companies after social platforms matured; the current crypto VC landscape is transitioning from speculative token allocations to real use cases and institutional-level operations.
Essentially, this represents capital concentration; as easy profit opportunities diminish, funds lacking value-adding capabilities exit or become marginalized, with remaining institutions acquiring projects through selection and service capabilities, leading the industry from dispersed investments to dominance by a few players.
ABAB News · Cognitive Law
- After easy money disappears, value-adding capability becomes the entry condition.
- When the phase of universal investment ends, institutional quality begins to filter.
- After network effects strengthen, the space for new companies will systematically narrow.